Year end planning works because timing is a tax tool. Using it intentionally creates cleaner books, lower liability and better flexibility heading into 2026.
If an S Corp owner inadvertently took a larger distribution than their ownership percentage allows, what is the exact documentation needed to ensure the correcting distribution satisfies the IRS and preserves the S Corp status?
You could always create a formal Board Resolution acknowledging the error and authorizing a corrective distribution. It's a hit or miss but nothing wrong in being prepared.
If an S Corp owner inadvertently took a larger distribution than their ownership percentage allows, what is the exact documentation needed to ensure the correcting distribution satisfies the IRS and preserves the S Corp status?
You could always create a formal Board Resolution acknowledging the error and authorizing a corrective distribution. It's a hit or miss but nothing wrong in being prepared.